State Attorneys General Activity on the Rise

June 22, 2023

State attorneys general (AGs) increasingly are scrutinizing the actions of private-sector businesses on a variety of topics, from environmental, social and governance (ESG) policies, to resolutions about guns, abortion and other hot-button issues.

Often viewed as a state’s chief law enforcement officer, an AG has multiple levers it can use to publicly pressure or influence companies’ decisions about these high-profile policy decisions.

With many tools at their disposal, attorneys general can send public letters, announce investigations, review potential antitrust or unfair competition infractions, and propose restrictions on state investment strategies. 

Republican AGs Battle Corporate ESG Policies

On May 25, 2023, Allianz, the world’s largest insurer, announced it would leave the Net-Zero Insurance Alliance (NZIA), a United Nations-convened climate alliance for insurers. The NZIA, formed in 2021, committed to achieving net-zero greenhouse gas emissions by 2050. NZIA has now lost at least seven insurance companies, including five of the eight founding members.

The sudden and significant departures from NZIA follow a May 15, 2023, letter signed by 23 Republican attorneys general that reads, in part:

We, the undersigned attorneys general, have serious concerns about whether these numerous requirements square with federal law, as well as the laws of our states, as they apply to private actors.

Under our nation’s antitrust laws and their state equivalents, it is well-established that certain arrangements among business competitors are strictly forbidden because they are unfair or unreasonably harmful to competition. …
Your conduct may also directly or indirectly violate other laws. To the extent that you directly insure activities in the United States or exercise control over an entity that does so, refusal to insure based only on the insured’s carbon emissions or compliance with the Paris Agreement’s environmental aspirations could violate state laws that expressly limit reasons for refusal to provide insurance.

Democratic AGs Weigh in on ESG Issues Too

Democratic attorneys general also are taking a more active role in opining about corporate activity. In response to a letter from a group of Republican attorneys general, 23 Democratic AGs wrote to several national pharmacy chains, commending them for their plans to offer two medications used to bring about a medical abortion, mifepristone and misoprostol. Led by attorneys general from California, Washington and Oregon, the AGs offer support by writing:

In a time when access to abortion is under attack — now more than ever in the past 50 years — we stand in full support of pharmacies … becoming certified to dispense and mail these essential medications and to make them available as broadly as possible. 

How to Prepare

Companies should evaluate the ramifications of addressing hot-button issues and preemptively navigate the risks associated with policies. The McGuireWoods Consulting and McGuireWoods LLP state attorneys general practice helps clients navigate these challenging waters through relationship development, media and public relations assistance, and by designing creative strategies to minimize litigation exposure. The team advises clients on how to audit their board actions and business policies, and how to position themselves to limit the scope of potential enforcement actions.

McGuireWoods would be happy to speak with your team to share experience-based insights about these challenging issues.